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Chipmakers worried about continued effects of rising Taiwan dollar

2011/01/30 16:51:31

Taipei, Jan. 30 (CNA) Taiwanese semiconductor companies haveexpressed concern over the continued pull on their profits caused bythe Taiwan dollar's rise against the greenback.

The adverse effects suffered on the fourth quarter of last yearas a result of the local currency's appreciation are likely tocontinue into the first quarter of this year, they said.

Taiwan Semiconductor Manufacturing Co. (TSMC) and UnitedMicroelectronics Corp. (UMC), the world's largest and second largestcontract chip makers, said that had it not been for the appreciatinglocal currency, they could have recorded slight or zero growth inrevenue in Q4 2010 from the previous quarter.

Instead, they saw a drop in revenue in the fourth quarter,according to their financial reports.

The companies said they will continue to be troubled by therising currency in the first quarter of this year, which istraditionally a low season, although this year demand has beenhigher.

UMC has predicted a 7 percent rise in the local currency againstthe U.S. dollar, while TSMC has forecast the Taiwan dollar would jump3.75 percent, from NT$30.4 in the fourth quarter of last year toNT$29.26 in the first quarter of this year.

As a result, TSMC forecast that its consolidated revenue woulddrop by 2.85 percent to 4.67 percent in the first quarter of thisyear from Q4 last year. It estimated that the Q1 2011 figure would bebetween NT$105 billion (US$3.6 billion) and NT$107 billion.

The companies concerns are set against their preparations toincrease production capacity in the first quarter of this year tomeet higher demand.

TSMC and Advanced Semiconductor Engineering, Inc., (ASE), one ofthe world's leading integrated circuit packaging and testing serviceproviders, are likely to reach a full production capacity utilizationrate in the Jan.-March period, while UMC is aiming for 90 percent.

(By Jackson Chang and Alex Jiang)